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TPI: Outsourcing Spending Increases, Contract Values Decrease

Outsourcing Spending Rises but Value Decreases

Outsourcing consultancy firm TPI said compared to 2010, businesses spent more on outsourcing in the second quarter this year. However, the average value of IT outsourcing contracts decreased for the same period.

Based on the TPI Index, while the total value of deals posted a 13 percent increase or €7.6 billion, the value of the global outsourcing industry decreased by 18 percent as the number of mega deals declined. In other words, there is an increase in IT and BPO spending, but the contracts have lower value.

“We have actually seen the pace of UK public sector activity increase in 2011, but contract values have declined,” said Duncan Aitchison, a partner at TPI. Increase in demand for outsourcing is seen in the UK, particularly in the Netherlands and France.